The 6.4-percent GDP growth in the first quarter may have fallen below expectations, but the Philippine economy showed signs of resiliency in expanding by more than 6 percent for seven straight quarters.
The government on Thursday released the official GDP data, which showed that growth in the first quarter of 2017 slowed from 6.9 percent recorded a year ago and the previous quarter’s 6.6 percent.
“Our first-quarter performance bodes well for the economy, as it is broadly in line with our 6.5-percent to 7.5-percent growth target for the year,” National Economic and Development Authority (Neda) Secretary Ernesto M. Pernia told reporters in a news briefing on Thursday.
“It is, however, below than desiredly expected, and for this, we are somehow downcast because we were expecting something like around midpoint of 6.5 percent to 7.5 percent,” Pernia added.
Data from the Philippine Statistics Authority (PSA) showed the services and industry sectors boosted GDP growth in the first quarter, expanding by 6.8 percent and 6.1 percent, respectively.
PSA data also showed that manufacturing buoyed the Industry sector by posting a year-on-year hike of 7.5 percent. The 20-percent decline in mining and quarrying activities, according to PSA data, tempered manufacturing’s performance during the period.
Construction activity, which is under the industry sector, also decelerated to 8.2 percent, from last year’s 14.2 percent expansion.
The agriculture, fishery and forestry sector recovered in the first quarter, growing by 4.9 percent from last year’s -4.9 percent.
Pernia credited Philippine economy’s performance during the period to the “recalibration” of government programs and a “changing of the guards”, coupled with healthy election-related spending.
“Last year was high due to base effects, because of election spending the impact of which has already dissipated,” Pernia said.
“We’ve benefited from the reforms put in place by the previous administration, and demonstrates the strategy of the Duterte administration to sustain good practices,” he added.
On the demand side, Pernia said improving global demand allowed shipments of Philippine goods to expand by 32.3 percent in the first quarter, the fastest since the first quarter of 2010, when exports grew 14.3 percent.
The Neda chief noted the Philippines remains one of the strongest performers among the major emerging economies in Asia. Pernia said the country overtook Vietnam and Indonesia, which grew by 5.1 percent, and Thailand by 3.3 percent.
“We are only second to China’s growth of 6.9 percent, while India’s number hasn’t come out yet,” he said.
Pernia made an assurance that the government is on guard for external downside risks, which could include market volatility with continued US market rate normalization, geopolitical tensions and the possible rise of protectionism sentiments in Western countries.
He also said he’s confident that the growth momentum can accelerate as the country embarks on an ambitious infrastructure blueprint—the Build Build Build program—which is expected to boost construction and public spending.
With a report from Bloomberg News